Dyes are of primary importance to textile manufacturing. These are xenobiotic compounds that are very recalcitrant against biodegradative processes. Nevertheless, in recent years, the knowledge base for using biocatalysts as remediation agents has increased substantially. In particular, various lignolytic fungi have been shown to transform several dyes to non-coloured products. The involvement of lignolytic enzymes, lignin peroxidase, Mn-peroxidase, and laccase, is described in relation to dye biotransformation. In the case of bacterial systems, azo dye transformation begins in most cases by a reductive cleavage leading to the formation of colourless amines. Some of the issues that remain to be addressed before biological systems, either whole cells or enzymes thereof, can be used for the industrial remediation of coloured wastewater from the textile dyeing process are highlighted.